Insurance news

The great car insurance robbery

25 September, 2007

Many motorists simply accept their insurer’s renewal premium quote, rather than bothering to check what deals rival firms are offering.

But savings of around 20 per cent – or £60 on the typical £300 per annum motor policy, could be made by switching to a more competitive insurer.

As the cost of motor insurance continues to rise above the rate of inflation, pushed up by soaring claims for accidental damage and personal injury, it is increasingly important for drivers to make sure they are not being taken for a ride, warns Moneynet.co.uk chief executive Richard Brown.

He said: “As your car insurance renewal date approaches you can expect to receive a renewal notice through the post from your current insurer. Do nothing, and your insurer will automatically renew your insurance policy and charge you for the privilege.

“But if you do not wish to renew your car insurance with the same provider, you must inform them, otherwise they will roll over the policy for another term. Although this may appear to be unfair the insurers argue that they are maintaining your legal obligation.

“Taking the easy option and simply rolling over is the equivalent to burning fivers - except that you are also lining the pockets of the insurance companies."

Most insurers concentrate on discounts to attract new customers and forget all about the customers who have been loyal and stay with the same company year after year.

According to Brown, one of the easiest ways to save money is to consider whether there have been any changes in circumstances – for example, you may have entered a different age bracket, 50-plus for example, and will qualify for special deals.

Or perhaps you have moved to a more insurer friendly postcode, or have swapped jobs – some occupations attract far lower premiums than other, for example.

Moneynet.co.uk recommends:

Compare like-for-like: Although price is probably the most important factor, you should also ensure that the policy meets your individual needs and circumstances. Every policy gives a different level of cover which can be matched to your own requirements. When looking around for an alternative quote make sure you compare policies on a like for like basis.

Resist pressure to change: Never allow yourself to be pressured into buying a policy. Although you will probably want to get it over and done with as quickly as possible make sure that you know what you are buying and check that it fully suits your own circumstances. If it turns out that your existing insurer is offering the best cover at the best price you shouldn't have any reason to switch.

Loyalty is not always repaid: Most insurers reserve their best rates for their new customers which means that you can be penalised for your loyalty. You should never just accept the renewal price from your existing insurer without comparing prices with other insurers.